Chapter 5 Double-Entry System（课件）-《实用会计英语》同步教学（大连理工大学出版社）

Double-Entry System CHAPTER 5 5-1 2 2 Double-Entry System The double-entry system is considered as the heart of modern accounting. All accounting systems operate on the basis of the double-entry system. Manual accounting system Computerized accounting system 5-1 Double-Entry System The double-entry system provides checks and balances to ensure that your books are always in balance. In double-entry accounting, each transaction has two journal entries: a debit and a credit. 5-1 Double-Entry System Credits Debits ＝ Because debits equal credits, double-entry accounting prevents some common bookkeeping errors. The sum of all debits should always equal the sum of all credits. 5-1 T Account The T account is the basic form of the double-entry system. Title of Account Left or Debit Side Right or Credit Side The rules of the double-entry system are that one transaction affects at least two accounts --- debit accounts and credit accounts. 5-1 Double-Entry System Assets = Liabilities + Owner’s Equity Accounting equation Account Type Debit Credit Assets Increase Decrease Liabilities Decrease Increase Owner’s equity Decrease Increase Income Decrease Increase Expenses Increase Decrease 5-1 Transaction Analysis Now, let’s analyze the transaction of George Ross Photocopy Company … 5-1 Transaction Analysis Transaction 1 March 3: Mr. George starts his photocopy company on March 1 with 20,000 us dollars that was immediately deposited into the bank. Assets Owner’s equity ? Increase or decrease Debited or Credited 5-1 Transaction Analysis Transaction 1 Account Type Debit Credit Cash at Bank Increase George Ross, Capital Increase Cash at Bank $10,000 George Ross, Capital $10,000 5-1 Transaction Analysis Transaction 2 March 6: Rented another office, paying a year’s rent in advance, $4,800 by check. Assets 1 ? Increase or decrease Debited or Credited Asse